All Forum Posts by: Zach Edelman

Preaching to the choir - god please pray that servicing can be automated and improved with the emergence of AI. Fortunately - we have a good relationship with our servicers and can get frictional matters that arise rectified/resolved relatively quickly, but the frequency of said matters could certainly be reduced. Glad there is a venting board for this!

If you do a DSCR loan and vest it in an entity - you and your partner can both PG the note and it will report to neither of your credit reports, thus having no impact on your DTI!

Sounds like an easily executable deal from what you've stated but likely need more color to offer path forward, terms, etc. Are there any more details on the scenario you can share?

@Brian Rocha -

Something to note is lenders will oftentimes slightly limit leverage on the purchase of a hard money loan or a "fix and flip" loan if you are doing borrower funded rehab. Limiting leverage, for any loan ever = reducing lender exposure/risk. So, the common person may ask - well how is me funding the rehab myself any more risky for the lender/why would they want to limit leverage? The answer is that if the lender that's doing the hard money loan is only funding the purchase and not the rehab, they then have less oversight of the project since they're not doing the draws, and thus not seeing the progress of the project and having control of the funds or draws from the rehab to make sure the project is progressing. I know for example we can fund up to 90% of the purchase and 100% of the rehab when we're funding the purchase and the rehab. If we're funding just the purchase, we fund up to 82.5% of the purchase price. Hope this helps!

You want to find a lender for this that specializes in STR financing!

I am doing a Joshua Tree closing right now and the future bookings were negotiated into the contract! 

You could also go DSCR if you're DTI does not qualify for a conventional loan and you'd still be at 20% down on DSCR. You can also partner up as well/have multiple people on the loan for down payment purposes!

Hello Will! I’m located in West Village and am serious about investing and connecting! Please reach out!

Unfortunately - there are a couple of issues here that likely make this hard to finance:

-"Cabin style" dwellings typically are difficult to finance as the secondary capital markets treats these differently than standard single family homes as the buyer pool for a "cabin" dwelling is less than that of a standard home.

- Yurts: Lenders typically have difficulty financing Yurts as they are moveable collateral. Lenders want collateral that can't be picked up and moved overnight. Let's say they need to foreclose and the borrower picks up the Yurt and moves it - now the entire loan they underwrote is thrown out, along with title insurance, and the lien on that property.

- Value: A SFR, or 2-4 unit (what it would be in this case) are residential assets and thus are valued off the "sales comparision approach" rather than the income approach. An appraiser likely won't be able to value a 1-4 unit property based off STR rents (whether projected or actually incurred), and if they are, the lender won't lend off said valuation for their applicable value (value they're lending off of).

With all this said, to answer your question of how you'd value this for a sale, I'd get a STR specific broker that's able to market your property as a turnkey STR with data on the rents, figures, etc. An ATX friendly STR realtor that I reccomend is CRIBS Consulting. They do property management for STRs and are a brokerage. Here is their website: https://www.cribsconsulting.com/

Welcome to BP fellow NYC resident!